Embattled Cimber Sterling collapses as investor halts funds

London
Source:
This story is sourced from Pro
See more Pro news »

Danish carrier Cimber Sterling has filed for bankruptcy, becoming the second major airline in the country to collapse in less than four years.

Cimber Sterling finally lost its battle to stay afloat after years of losses, and a disastrous initial public offering which followed an ambitious attempt to build on the demise of Sterling Airlines in 2008.

While Cimber Sterling had recently been taken over by an investment group with the intention of combining it with Scandinavian regional carrier Skyways, the carrier states that the owners have decided "not to support the company financially any longer".

A court in Sonderborg, where the airline is based, will receive the bankruptcy declaration today.

Cimber Sterling is proposing that, under a curator, it continues flying at least four aircraft on routes it operates for SAS Group.

"The board of directors and the management team has worked intensely to ensure a turnaround of the company for several months but unfortunately we did not succeed before we ran out of time," says Cimber Sterling chief Jan Palmer.

"It was simply not possible to change the direction of the company as fast as needed and thereby in due time deliver the necessary financial results."

Cimber Sterling emerged when regional carrier Cimber Air boldly took over the Boeing 737 fleet of Sterling Airlines after its failure in 2008.

But the airline struggled financially and its listing on the stock exchange, the following year, backfired as the share price tanked, never recovering to its debut level.

Efforts to slash costs and restore profitability failed and the airline was forced to seek financial support as it battled to stem losses.

Cypriot-based investor Manswell took over Cimber Sterling and planned a broad co-operation with Skyways and City Airline, in which it also held interests. Under a revised strategy Cimber was to abandon its experiment with the 737s and return to its roots as a regional operator, using ATRs and Bombardier CRJs.

Cimber Sterling says: "The management team will work closely together with curator to ensure as much value as possible in the company and to continue as much of the operation as possible under a reconstruction of the company.

"At the same time we will suggest that we together with curator explores the possibilities to operate more aircraft and thereby ensure as much value as possible for a possible buyer."